Australian city council divests from fossil fuels

The City of Moreland, north of Melbourne, has become the first municipality in the state of Victoria to ditch holdings in fossil fuels companies, following calls from campaigners to cut ties with the businesses most responsible climate change.

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The city council become the latest to sign up to the growing global divestment movement, joining Seattle in the US, Oxford in the UK and Dunedin in New Zealand.

On Wednesday the council voted to rule out future investment in coal or gas companies and also pledged to start moving its $36 million (£19.6m) investment portfolio away from financial institutions that funded fossil fuel extraction. The council had been put under pressure by a petition from local residents demanding such action.

Michael Stanley of the environmental group 350.org Melbourne and Climate Action Moreland said, “The leadership shown by Moreland will be an example to spread to other local councils in Australia, showing that fossil fuel divestment empowers local communities in the fight against climate change.”

The approved motion explained the move was part of the council’s work to fight climate change.

“Moreland also recognises the role of many banks in financing new fossil-fuel projects in Australia. For this reason the City of Moreland will work to change its banking practices to both minimise indirect investment in fossil fuels, and -where consistent with prudent financial management – direct other banking activities to institutions that do not fund fossil fuel investments”, the motion stated.

The divestment movement is gaining momentum worldwide, as campaigners call on investors to cut links with companies that are worsening climate change and putting their money at risk. Many analyses has warned that if climate policies are put in place, those who have invested in fossil fuels companies can end up with devalued ‘stranded assets’.